The Federal Housing Finance Agency (FHFA) announced that Freddie Mac and Fannie Mae will require servicers to suspend foreclosure activities for up to 60 days if the servicer has been notified the borrower has applied for assistance under the Homeowner Assistance Fund (HAF).
This action is the latest step taken by FHFA to assist homeowners who have been economically impacted by the COVID-19 pandemic.
“FHFA is committed to sustainable homeownership. Today’s action will provide borrowers who need temporary mortgage assistance with additional time to be evaluated for relief through their state’s approved Homeownership Assistance Fund,” FHFA Acting Director Sandra L. Thompson said.
In accordance with this new requirement, Fannie Mae and Freddie Mac have each issued updated guidance documents for implementation of this 60-day suspension requirement. According to these guidance documents, effective immediately, servicers must delay or suspend initiating any judicial or non-judicial foreclosure actions, moving for a foreclosure judgment or order of sale or executing a foreclosure sale, for up to 60 days if:
- The servicer has received notice from a mortgage assistance fund program provider that the borrower has applied for HAF assistance.
- The servicer has sufficient time to delay initiation of the foreclosure process or moving for a foreclosure judgment or order of sale.
- The servicer, in the case of a foreclosure sale, is notified at least seven days before the sale.
- Any foreclosure proceeding or execution of a foreclosure sale can be delayed without dismissal of the action.
The guidance also documents that if servicers determine that they are not able to delay initiation of the foreclosure process or moving for a foreclosure judgment or order of sale, the servicer must document in the loan file the reason it was not able to do so and have supporting documents available upon request.